tv Nightly Business Report PBS August 6, 2014 7:00pm-7:31pm EDT
this is "nightly business report" with tyler mathisen and susie gharib. >> deal breaks down, sprint shares plummet after ending the bid for t-mobile. now the company has to find new growth the hard way. >> and record settlement. bank of america and the justice department are close to a deal that would cost the bank $17 billion to settle mortgage related misconduct. >> fight of a lifetime, what happens when unapproved drugs are the only hope for very ill patients? tonight we start the three-part series, desperate measures. that and more tonight on "nightly business report" for wednesday, august 6th. good evening, everyone. i'm sue herrera filling in for susie gharib. >> i'm tyler mathisen. good evening. a beautiful day on wall street, but not for two stocks whose
prices were plumped up by deal talk. we told you about 21st century fox withdrawaling the bid to acquire timewarner. timewarner stock fell nearly 13% today. more on that in a moment. today, we learned that sprint has hung up on its pursuit of rival wireless carrier t-mobile, the big reason, unlikely regulatory approval to merge the nation's number three and number four telecoms. shares of sprint got slammed, down 19%, shares of t-mobile fell, too, but a smaller more manageable 8%. what is next for sprint and for t-mobile? morgan brennan takes a look. >> reporter: the mobile wars continue, taking an unexpected turn that could leave sprint at a disadvantage. sources confirm that the wireless carrier has abandoned the much anticipated bid for smaller rival t-mobile. the industry is expecting the two to announce a merger in a
deal that would value t-mobile at $32 billion. >> this is difficult news for sprint. sprint has all but abandoned almost any plan b other than merging with t-mobile. so now they have to go back, lick their wounds and come up with an operating strategy that means more capital spending and lower prices for consumers, and those will do real damage to sprint's income statement. >> that pushed shares of sprint down by double digits. the company poured billions into a network upgrade, poor service and the loss of millions of subscribers. now the upgrades are almost finished but sprint says to better compete with verizon and at&t, it needs scale, something it hoped to get with t-mobile however regulators voiced of significa -- opposition. what about t-mobile? >> t-mobile is probably going to be fine.
t-mobile has right now a ton of brand momentum. it's prices are already low, so it's gaining market share and it's got a lot of cost reductions ahead of it because of a merger that it did a year or so ago with metro pcs and so, it's income statement and it's balance sheet keep getting stronger as time goes on. >> reporter: iliad put an offer for majority steak, as well, and experts say this could present a buying opportunity for dish network a company that also faces increased competition as at&t buys the rival direct tv and comcast merges with timewarner cable. for sprint, the company is also welcoming a new ceo, whose cell phone d by a distributor. more on the abandoned bid by
21st century to acquire timewarner. timewarner's shares fell. thanks to hbo and the game of thrones series. after the bell, the latest quarterly earnings at 21st century fox were better than expected thanks to the film and cable tv networks. revenues of more than $8 billion beat wall street estimates. the stock was initially flat after hours but then moved higher. julia boorstin was listening into the conference calls. rupert murdoch was on the call and what did he say about the withdrawn bid for timewarner? >> he addressed the issue straight off the bat. the decision came down to two fundamental issues, one was the fact that timewarner's management board was not willing to sit down and negotiate and two, the reaction of fox' stock and it continued to decline on the news. he was really looking to do what
made most sense for shareholders, he said. >> what is next for rupert murdoch? is there any possibility he would come back this year or 2015? >> tyler, he also addressed those questions. there are rumors flying he doesn't mean he's dropping the bid, but he said we're rest lute in the decision to move on and then fox president and coo chase kerry echoed that. he said this is it, we're moving on and really indicating they are not planning on going back. the earnings call was wrapped up, there were questions what else they might want to buy or their outlook in general. they said the reason they were interested in timewarner in the first place is because scale is important but they stress that they don't need to make an acre session. >> what about timewarner? are you hearing about what they may do next? do they have to do anything? >> the most important thing is execute on the plan that ceo
laid out because they have to convince investors it makes sense to go forward as a stand alone company and not do a merger. >> julia boorstin in los angeles. on wall street, stocks end a choppy trading section after nato confirmed russia has 20,000 combat ready troops on the eastern boarder of ukraine. the major averages shrugged off a sale off. the dow added 13, the nasdaq higher by two and the s&p was up by 3/100ths of one point. bank of america is close to settle the mortgage related misconduct and the price tag of the settlement could be a record. kayla tausche has the details. >> reporter: a million tie billion-dollar settlement after fraud mortgages leading up to
and during the financial crisis. a settlement that is between 16 and $17 billion would cap more that a year-long investigation, which bank of america disclosed in august of last year, disclosing an investigation by the department of justice and relevant state attorneys general over the mortgages as other banks at that point, too, were in the spotlight. settling for $13 billion, citi settling and bank of america in recent weeks seen its talks with the government ratchet up. we don't have an agreement on paper yet. the number could move around but would be a positive development for a bank that had more than $50 billion in settlements, and in payments over legal issues since the financial crisis. for "nightly business report", i'm kayla tausche. bank of america was allowed to raise quarterly dividend for the first time in seven years from one cent per share to five.
that's after the okay for the revised capital plan, the third one submitted this year. vladimir putin is retaliating against the u.s. and other countries for imposing the tough economic sanctions over the conflict in ukraine. russia is now limiting or out right banning the import of many types of food and other agricultural products from the same nations. china is cracking down on western companies for monopoly behavior. is beijing just pressuring foreign manufacturers that are too attractive to the chinese consumers at the expense of chinese firms? more from beijing. >> reporter: china says chrysler and audi will be punished. the car industry is the latest to face government scrutiny as beijing steps up efforts to enforce the anti monopoly law
and that put many car players on edge. the investigations are wide-spread. regulators are targeting pricing of cars and spare parts but it's unclear what the government means by monopoly behavior or what the punishment will be. in the past several days, some car makers drop prices, chrysler cut the price of the grand cherokee along with audi slashed prices for spare parts. the owner of mercedes benz is under investigation. it dropped prices for parts by 15%. the authorities say the investigations are to protect chinese consumers and bring companies into line with china's anti monopoly laws it is when they feel unfairly targeted and complain about the lack of transparency. for "nightly business report", in beijing. still ahead, trucking companies with safety violations that are easily able to wipe their dirty records clean.
eamon javers has the story in the final part of the series, collision course. a sizable jump in domestic energy production is a big reason the deficit was lower than expected in june and w crude prices are now at a six-month low. but how can the u.s. safeguard all that energy? jackie deangelis looks at efforts to predict existing oil pipelines and make sure future products are secure.
>> reporter: as the u.s. strives towards energy dependence, the debate to transport safely heats up, pipelines, how to make them more efficient and limit accidents. energy partners is one company leading the way, protecting the 50,000 miles of pipe using smart pigs, launched into pipes, they find stress, cracks and corrosion alerting the companies to issues before they arrive. >> smart tools are the primary source for being able to go in and understand what is going on with the pipeline. >> reporter: recent rail accidents and a barge accident in march that deposited nearly 170,000 gallons of crude into the houston ship channel are prompting industry experts to believe that pipelines are the safest way to move high volumes of crude. >> i think if you look at the safety record of crude oil pipelines versus alternates, pipelines come out, you know, on
top. >> reporter: transcanachanc rai the debate. while the project would bring jobs to the u.s. and transport 8,000 barrels of crude a day, environmentalists worry about leak and explosions. pipeline components like embridge, the largest importer of crude into the u.s. say safety is paramount and they are working on it every day. >> i could talk about the safety record in terms of those 13 billion barrels and the 99.993%, but we don't talk a lot about that because we're really focused on the very small percentage and no leak is acceptable. >> reporter: they spent $4.5 billion on pipeline integrity over the last couple years. wall street likes pipeline companies, too, expansion is projected and the group on average pays distributions of 5%. analysts say el paso partners
and plains all american are some of the stocks to watch. one thing everyone agrees on, crude will get where it needs to go, and pipelines will grow, how quickly is the question. for "nightly business report", i'm jackie deangelis in minnesota. chesapeake energy's second quarter profits slides nearly 70% and that's where we begin market focus. the natural gas producer says lower prices put pressure on the results but the company raised the mid point of the outlook as more wells are connected to pipelines. shares rose slightly closing at $26.19. ralph lauren also saw its earnings fall as the retailer continued to invest in expansion efforts. the company gave guidance saying it experts revenue to climb by as much as 6%. that sent shares slightly higher to $156.88. disappointing investors when that company announced its expecting the slowest full-year
revenue growth in the 20-year history. the it services provider blamed delays in booking revenue for from large deals. the board did expand the repurchase program by half a billion dollars. shares tumbled down more than 12.5% to $43.67. viacom missed estimates. the results were impacted by fewer new movies. the owner saw a moderate gain in the cable network revenue but not enoh to offset the slump. the stock dropped nearly 2% to $80.30. cutting the 2014 sales target, the reason, price hikes to offset rising costs have turned off some retailers and consumers damping demand. for the second quarter, the oreo cookie maker saw earnings rise as lower expenses offset declining revenue. shares fell nonetheless to $35.70 and shares of walgreens
speaking of falling tumbled today after the retailer slashed the 2016 profits that added to disappoint that the company won't move the headquarters to europe for a tax advantage. we told you about that last night. the stock 14% lower at $59.21. a russian hack earring has stolen 1.2 billion user names and password combinations. hold security uncovered that online breach reporting the data was stolen from more than 400,000 websites, the largest known collection of stolen internet credentials. they did not say the names of the victimized websites. >> all this week we told you how long-haul big rig trucks are on a collision course with u.s. drivers. in tonight's final installment, we look at trucking companies with serious safety violations
that were forced to shut down, only to start up again under different names. eamon javers has the story. >> reporter: kelly linhart who had 15 years of experience and the father of four was doing a routine truck inspection in 2008 when he was hit and killed by an oncoming truck. >> fell asleep by his own admission, ran off the road and ran over kelly dragging him to a horrible death. >> reporter: he's a plaintiff's attorney who specializes in truck cases. he represented the family and deposed the driver. >> you admit you were driving under the influence of methamphetamine during the accident, right? >> yes. >> reporter: he admitted to driving under the influence. he was sentenced to 40 months. he admitted to prior convictions for meth and marijuana. who would let a driver with that record behind the wheel of an
80,000 pound truck? this man, forest rangeloff. >> there were safety problems, yes. >> reporter: he says range's company was nothing more than a chameleon carrier. they shut down and opened under a new name. forest company range transportation had a conditional safety rating from the government, a warning to companies they need to improve. after the linhart crash, he filed for another company. >> i see too often in this case and other cases i handle, where the owner of the company simply closes down, refuses to pay fines and starts another company. >> reporter: forest says he passed a drug test and told him before the accident he didn't use drugs. >> there are legitimate reasons to have separate companies but when we're talking about a
chameleon carrier, it's a trucking company that is so unsafe, the government fines it. instead of paying the fine, the owners shut it down and start another company. >> reporter: in one year in 2010, the government accountability office found over 1100 new trucking company applications that appeared to be changing their name to clear their troubled records. nga found 18, the rate for 9 million carriers. the out going head for the safety administration. gao found in 2010 her agency checked 2% of new applicants for being potential chameleons. they say more is being done. >> what we have done is created a system we call vetting. are there patterns in this company's operation that show that they actually are sharing address with the company we shut down before? >> what's the penalty?
>> there are a series. the highest penalty is we shut them down. we say very clearly, you are not authorized to operate. >> for this family, they were able to arrange a confidential settlement with the company that hired forest in the first place. he was dropped from the lawsuit. for "nightly business report", i'm eamon javers. >> if you would like to read more about the investigation into the trucking industry, head to our website, nbr.com. still ahead, when unapproved drugs are the last hope for very ill patients, we'll bring you the first of the three-part series, desperate measures, next.
>> toght, we bring you the first of a three part series, desperate measures. treatment options run out and the only thing to try is experimental drugs. they turn to drug makers for compassion et use of the drugs. meg terrell has the story. >> reporter: natalee is determined to succeed. whether on the soccer field or training her dog, missy. >> good girl. >> reporter: now she's tackling the challenge of her life. go years ago natalee was diagnosed with a rare form of cancer. >> i started getting these really bad headaches and they were a lot worse than normal, and so my mom took me to the
doctor one day and they were doing some x-rays and stuff and eventually found that i had a large tumor in my chest. >> reporter: the cancer had spread to natalee's brain. since then, she's been through ten surgeries, radiation and multiple medicines, some with difficult side effects. >> none of them really seem to have a good effect on my cancer. >> reporter: natalee's doctors have identified a new class of drugs they think may work for her. immune therapy. they harness the system to fight cancer, but they are not yet approved and natalee doesn't qualify for on going clinical trials. she's three years too young. >> we hoped there could be an age exception made or some sort of provision so she could try some medicines, best ideas, we just kept finding that that door was closed. >> reporter: they are in a position countless others have been before, they are out of options among approved drugs or
those available and natalee is running out of time. so they turn to compassion et use, a system designed to act as a last resort. >> compassion use is a way for people to get use outside the context of a clinical trial. >> reporter: director of the night cancer institute, adopted natalee's cause. >> with promising new therapies, we may exclude somebody for a relative ll lly trif l reason. in her case, it's her age. if we think she might respond, we height want to provide access. >> reporter: patients need the support of their physician, okay from the fda and a drug maker willing to supply the medicine. that's where natalee and many other haves gotten stuck. they and their doctors have asked several companies for access to their therapies. they have said no. the companies say a number of issues play a part, having enough supply for the medicine and how thoroughly the drugs
have been tested. pressure is mounding on drug makers, not just for natalee but others that turn to social media for pleas but it's a complicated issue. >> two or three out of hundreds have seen any benefit. sometimes people say what's the difference, if you're dying, why not take the shot? new drugs can kill you faster, new drugs can make your sicker. >> reporter: natalee's dad says they understand the risks. >> what we know for sure, we know exactly what natalee's disease does when unchecked and it's excruciating pain, things that limit her and with some of these new medicines, actually, the risk is less than other medicines in the past. >> meg terrell is with us now. meg, these raise important ethical questions, business questions, what are the limits of compassion use, when does it make sense, and not? >> talking with the fda and the doctor, they say you need the
support of your physician to interact and there needs to be a scientific rational. it can't b a shot in the dark. there has to be a reason to think it might work and natalee's case, she did test positive for a bio marker for the immune therapy drugs. they think there is a good scientific reason and the potential benefit outweighs the potential risk. >> risk, yeah. >> so a tough situation. >> the three companies that said no, what are the odds? do they ever change their mind? can you, you know, reapply or appeal to them again? >> well, the family certainly has been continuing to try to do that and talking to them all the time. it's rare that we've seen it happen but there was a case, josh hardy was a seven-year-old boy, an eight-year-old boy now was asking for an experimental drug from a company, and they had a really strong social media campaign and that's another element to the story. patients are getting a stronger voice through social media. >> social pressure on the companies. >> that helped them reach an agreement to start a new
clinical trial. they enrolled josh as the first patient. there are ethical considerations here. there are a lot of other patients that asked for the drug and didn't get it before. there are questions of inequity in the system. >> there is reasons a company might say no, not enough supply to supply to the clinical trial. do the -- what are some of the other reasons and do the companies have to tell you why they rejected your request? >> there aren't a lot of guidelines how to communicate. that's an issue in the system people tell me, the other reasons they say no, it's about getting drugs to market for the broadest population of patients, as fast as possible and the companies say you have to do that through clinical trials and we take a much closer look at this in the next package on this which runs tomorrow night. >> what do you have tomorrow night? >> a look at why the companies say no. i talked to a lot of companies how they make the decisions and these are real people and they are making heart wrenching decisions about this. >> i would not envy them being in that position and having to say no to a beautiful young girl
like that. on the other hand, the mortality issues if she takes the drug and something happens and that leads to liability issues, as well. >> that's right. >> we look forward to chapter two, as well. >> thank you. >> to read more about meg's desperate measures series, go to our website, in,nbr.com. that will do it, i'm sue her rare are in for susie. thanks for joining us. >> i'm tyler mathisen. thanks from me, as well. we'll see you back here to >> this is "bbc world news."
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